High Court determines that risk of negative patient outcomes outweighs potential intellectual property breaches

In a recent decision, the High Court has declined to grant an injunction preventing potential copyright breaches, due to a significant risk that the injunction would seriously impact public health administration.

Typically, when considering whether to grant an interim injunction, the court's focus is on balancing the plaintiff and defendant's respective interests. Cases which turn on third party considerations or wider public interest concerns are less common.

A famous example was Finnigan v New Zealand Rugby Football Union Inc (No 3), where the High Court granted an injunction preventing the All Blacks from touring apartheid South Africa. In that case the public interest was a major factor including the risk to New Zealand's interests at home and abroad, and the risk of violence and bloodshed to black South Africans.

The present case is a further example of circumstances in which the wider public interests / interest of third parties trumps a party's immediate commercial interests.

The case of Medtech Ltd v Valentia Technologies Ltd [2024] NZHC 2107

Medtech and Valentia are competitors in the practice management systems (PMS) market. Valentia also provides the technology behind the provision of Shared Electronic Health Records (SEHR); a central repository for storing patient summary care records. SEHR is regularly updated and accessible by health providers including in emergency and urgent settings, and medical practices which contract with primary health organisations (PHOs).

Medtech sought an interim injunction prohibiting Valentia from extracting data from any of Medtech's software, other than with the assistance or approval of Medtech.

The principles of injunctive relief

An interim injunction is a temporary remedy the court can grant to protect the applicant's interests pending resolution of legal proceedings. The injunction will usually restrain the defendant from doing something.

The considerations involved when granting injunctive relief are well established. The applicant must first establish that there is a serious question to be tried in the proceeding. In other words, a genuine cause of action that needs to be determined in the substantive proceeding. The Court then considers where the balance of convenience lies, which considers the impact on the parties of the grant or refusal of the relief sought. Finally, an assessment of the overall justice is considered (akin to a 'sense check').

What was decided

The Judge discussed the five causes of actions brought by Medtech and determined that there were serious questions to be tried. In her view, there were tenable cases for breach of copyright, misuse of confidential information, interference with contractual relations and a breach of the Fair Trading Act claim.

She then considered the balance of convenience and overall justice considerations. The main issue here was that if the injunction was granted, SEHR records would not be updated, meaning health records could be incorrect when accessed by health services. This would be particularly worrying when there is an urgent need to obtain these records, but they are incorrect and / or the patient is incapacitated and unable to update their health practitioner. Ultimately the primary reason for declining the injunction was the concern around the potential impact on medical practices and on the public at large.

In a forceful passage of the judgment, the Judge stated 'Medtech encourages me to have confidence in a cooperative approach being taken and everything will be well…Given the acrimony and suspicion exhibited by the parties towards each other, that provides me with very little confidence indeed. In my experience, the parties cannot agree a timetable date let alone on what terms data should be extracted.'

What it means

The High Court was not willing to leave the wellbeing of patients in the public health system in the hands of warring commercial operators. In balancing the competing interests of those involved, the court put greater weight on the risk of negative patient outcomes than potential intellectual property breaches.

This case update was written with the assistance of Charlie Robinson, a Solicitor in the Wellington Public Law and Dispute Resolution team.

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